November Update : NetWorth and Savings Rate

Well howdy doody.

The start of an uncharacteristically warm December week brings another Net Worth update.  I hope you’ve all been fighting stoically against the marketers and advertisers that are trying to spin you into a Christmas spending frenzy.  Frugality armour polished and at the ready, a wry nod towards the advertisers efforts, but it’s not working.  Not on YOU.
As part of the growing platoon of personal finance bloggers, I update my networth and savings rate each month and compare my progress against goals set at the start of the year.
I set two goals, one to increase my networth by 40% and the other the hit a total savings rate of 60% for the year.
Both are pretty tough targets (and have been tough), but I have found that setting goals a very productive process.  I’m looking forward to setting some tough goals for 2016. 
Today’s writing, spreadsheeting and blog updating tunes are a throw back to the 90’s.  A bit of Silverchair, for anyone that remembers them.  All together now “Yeah…..I’m a freak of nature….Yeeeeahh I’m a freak”.  No?  Just me?
Goal 1 – Increase Net Worth – Target of 40% across the year
The target
To be on target I need to aim for an increase of approximately 36% to the end of November.
For this target my Net Worth includes my ISA, Pension and cash assets, less any borrowing (i.e. credit cards). 
I don’t include the equity in my house in this amount given it’s illiquidity and uncertainty around valuation.
And how did it go?
Net worth increased by 7.4% in the month (off the back of a 10% increase last month) and that brings me to a 51% increase since the start of the year!
I’ve hit my target a for the last month and it continues to climb!  *Does a saving and investment dance*

My spooky eyes spy an upward trend in that bar chart.
NW for the year to date is here.
My FI-O-Meter tells me that a fund of just under £80k provides £260 of withdraw potential each and every month, according to the 4% rule ‘o’ thumb.

That would cover the monthly payments on a new  BMW 1 series…if I was a pillock.  That comfortably covers the food for me and Mrs Z, amazing!  Or one of these every single month.  I’ll pass for now and continue on my quest for Financial Independence.

Savings rate – Target average of 60%
I set a target of 60% at the start of the year, to challenge myself to get my savings rate up towards the lofty heights seem by some other bloggers and it’s being going pretty well.  I’ve been really pleased, and genuinely surprised, that I’ve managed to hit 60% most months.
Managed to eek out a little bit more savings this month, so the in month savings rate was 62.9%, better than last months effort of 53.9%.
That seemingly Herculean effort increased my savings rate for the year from 58.3%  to 58.7%.  It’s going to take a savings rate of 70%+ in December to crush this goal.  Seems unlikely now. 

Even with the overall goal looking like a fail, I am still pretty happy with this one.  I’ve learnt a fair amount about how much I can save and where I was letting money slip through my fingers.  Pretty confident I can have a better crack at it in 2016.
PASS (in month)
While upswings in the market have had an impact on my NetWorth, it is really my savings rate that has been pushing it up.  Especially when you are at the start of savings, the amount you have in your gold chest is small enough that market impacts are relatively small in absolute terms.  But you can still have substantial impacts on your Net Worth simply by saving more.
£1,000 saved on £5,000 in an increase of 20%.  £1,000 saved on £1,000,000 is only 0.1%!  The amount you save early on has such a big impact on your Net Worth.  As your savings grow then the force of the market behind it also grows and your savings rate becomes less and less persuasive on your networth journey. 
A 5% upswing in the markets on £5,000 is only £250.  A 5% upswing on £1,000,000 is £50,000.
Message received loud and clear from the mathematics of investing, keep turning that screw early on and save like a savings-beast-o-saur.  

If anyone is reading this and thinking about getting started but thinking…

I know nothing about investing, it’s best to read around for a bit so I know what I’m doing.  Then I’ll start.

Just start now.  Right now.  Start piling it into a cash ISA whilst you read up on how you want to invest, on what works for you.  Save, save, save.

How did you get on?  Going to smash your goals for 2015?  Primed and ready to get devising some new ones for 2016?
Spend less, Save More and Escape the Horde
Mr Z

8 thoughts on “November Update : NetWorth and Savings Rate

  1. M from There's Value

    awesome. keep slashing those bills and saving what you can. your SR is something I could only dream of, but who knows, maybe I will get up to 40% next year? NW is going well, hopefully we won't see anything too crazy happen in the markets, although if they fall, that just means we get to average down, yay.

  2. Stuart

    Nice blog update. I got as far as Silverchair then kinda digressed onto Kerbdog (heavily recommended). Now alcohol is consuming me as I read the rest. My personal updates have been heavily skewed these past 3 months with ridiculous amounts of overtime – £800 extra a month on average (and 0 free time). Stooze pot has hit 30k too. The banks money earning me interest – how could I refuse. Very kind of them. The wife is all over amazon and ebay as a result… with my credit card. Total consumer zombie is MrsK.

    Good advice on the best time to start saving being 'now'. Unfortunately I attempted to increase my amount at the start with excessively risky punts on oil companies. That didn't go so well (Afren !). Back on track now though and risk has been managed much more effectively. 18-20 years to go!

    I look forward to your December update.

  3. London Rob

    Hi Mr. Z,

    Congratulations on another good month, and keeping the NW going up! As always spot on with the save as much as fast as possible – it really does make a huge difference. FWIW – on your 80k you ought to be able to get dividends of 260 per month average without even having to sell capital if you get it right 🙂
    London Rob

  4. Mr Zombie

    Ohhh yeah, like a frugal ninja. Ker-SLASH.

    I am trying to hammer it while I can, if Mrs Z and I have kids in the next couple of years it's not going to be possible to save as much!

    Yeah, there has been a bit of muttering about 2016 being a bad year…trying to just ignore it all! Keep on saving 🙂

  5. Mr Zombie

    Hey – just having a listen to Kerbdog now. Very 90s 🙂

    Very kind of them indeed! I had a few similar months with back dated pay all coming through, it would be fucking ace if it was like that all the time 🙂

    Way back I started off we a few random individual stocks, ended up breaking even at the end of it, even took a chance on BP that paid off. Lucky in the end, haha


  6. Mr Zombie

    Cheers Rob!

    £260 a month in income would be nice! For now, I'm just going for total return, get my gold chest as big as possible as quick as possible.


  7. weenie

    It's bloody brilliant that you can increase your savings rate to over 60% at a time when people are getting into silly debt buying Christmas presents – congratulations and well done, very impressive!

    Am thinking of my goals for 2016 and I think I'll take a leaf out of your book and keep them simple – I got a little distracted last year!

  8. JoeCrystal

    That is pretty good to have high saving rate and increase in net worth. I am now inspired to have a goal of 25% of my after tax income into the Pension & NISA by the end of 2016. 🙂


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